MANAMA, BAHRAIN — Arla Foods, an international dairy cooperative, has reached an agreement with Mondelez International, Inc. to acquire its Kraft branded cheese business in the Middle East and Africa. Financial terms of the transaction were not disclosed.
Arla Foods is owned by 11,200 farmers from Denmark, Sweden, the United Kingdom, Germany, Belgium, Luxemburg and The Netherlands and produces a range of dairy products under brand names including Arla, Lurpak and Castello.
The acquisition includes Kraft branded cheese products in the Middle East and Africa markets and a cheese manufacturing facility in Bahrain. The deal does not include cream cheese brand Philadelphia or cottage cheese brand Jocca, which will remain under the ownership of Mondelez International. The recently opened biscuit manufacturing plant in Bahrain also is not affected by the transaction. There are no changes to the cheese and grocery business of Mondelez International in other markets around the world.
“We are pleased to welcome this successful business into the Arla family,” said Tim Ørting Jørgensen, executive vice-president of Arla Foods’ international business. “We have an established and growing business in the Middle East and know our consumers and customers well in this part of the world. As such, this deal is an excellent strategic fit for us as it enables us to both expand our branded presence in the cheese category and secure the local production capacity we have been looking for to continue to grow our business.”
For Mondelez, the transaction supports a recently announced strategic plan to drive top-line growth and generate shareholder value by focusing on faster-growing categories of chocolate, biscuits and gum and candy.
“We’re very proud to have been the custodians of the Kraft Cheese brand in recent years," said Maurizio Brusadelli, executive vice-president and president, Asia Pacific, Middle East, and Africa for Mondelez International. “Our talented teams have been instrumental to the success of our cheese business in this region, and I am confident that they will continue contributing their significant expertise under new owners. The time is right for the brand to take the next step in its journey and we are very happy to hand over this successful business to Arla Foods.
“We are very happy with our investments in Bahrain. Our recently inaugurated state-of-the-art Biscuits factory will continue serving local and export markets, and we will now also produce our beloved Tang powdered beverages in this plant.”
The transaction is expected to close within the next few months and remains subject to regulatory approvals.